Friday, September 12, 2008

More consolidation in continental banking as Commerzbank and Dresdener Bank have been happily sharing the same bed and shower arrangements since last month.

Now Deutsche Bank, the biggest bank in Germany with 14 mn customers is setting it's sites on a mega deal to take a 29.75% lump of Postbank, Germany's biggest retail bank with 14.4 million customers and a ravaged stock price and a fall in value from to €7 billion from €10 billion earlier in the year.

Deutsche and Postbank have been seen dining in the finest restuarants and holding hands discreetly and their eyes have been meeting over the lightly underdone lamb cutlets and may soon result in the exchange of room keys, before they pass the word to Daddy at Deutsche Post.... say Lord Patel's moles in the discreet hostelries in Bonn.

Lord Patel's data collection and surveillance systems have been told by the Bonn insiders, where every house is connected to Mozart, he ate there, tied his shoes, here, cuckolded the poor old man there, ate choclate cake here... and they have been telling the The General-Anzeiger newspaper in Bonn where Postbank is based,that a nice chunk will secure an option to also buy the remaining Postbank shares owned by Deutsche Post, which holds 50 percent plus one share in the bank.

The venerated and generally truthful newspaper says that Deutsche Bank's supervisory board have seen the romabtic liasons and have given their blessing to an exchange of body fluids.

Deutsche Bank has been under increasing pressure to agree the Postbank deal in recent weeks after Commerzbank made its move on Dresdner, which kick-started a new round of long-overdue consolidation in Germany's fragmented banking sector.

Handelsblatt reported that the 29.75 % stake in Postbank would cost Deutsche around €2.1 billion.

Then the nasty Spaniards have upset the wedding plans. Spanish Lothario,Banco Santander SA, Spain's biggest bank, has offered to buy up Deutsche Postbank AG in one gulp to expand in Europe's biggest economy.

Lord Patel's moles in Bonn savouring their sachetorter have heard in the last hour that Deutsche Post's supervisory board agreed to sell a 29.75% stake in its Deutsche Postbank unit to Deutsche Bank for a eye goggling modest €2.8 billion putting a total value of about €11/12 on Postbank ...... and you keep the greasy dagos out the door.

Deutsche Bank has said Deutsche Post had also given it an option to acquire another 18 percent of Postbank at a price of 55 euro ($76.63) a share. That option could be exercised from a year to three years after the acquisition of the initial stake closes.

Furthermore, Deutsche Post has granted Deutsche Bank a right of first refusal for the remaining Postbank shares, a move that guarantees Deutsche Bank has the first shot at becoming the bank's majority stakeholder. PostBank Press release xdetails the need for the regulators to approve.

Sounds like a done deal from the public bar of the Dog and Duck..

Lehman's death throes watched calmly by Paulson

Meanwhile in New York Lehman's shares have fallen even more, to below US$4.00 and the bank has a Market Cap of only US$5 Bn (they wrote off US%5.6 Bn in Q3) - Bank of America (Market cap US$147 Bn) is being touted as a white Knight but Paulson says no Government funds are available. You really can't have any sympathy with the bankers who lave been throwing the omen off the seldge as the wolves circled ,Erin Callan (Lehman Brothers), Zoe Cruz (Morgan Stanley), and Sallie Krawcheck (Citi) - hence the "Glass Cliff".. in short , they are set up for failure ... see Carly Fiorina (Hewlett Packard), Kate Swan (W.H. Smith) and Patricia Russo (Alcatel-Lucent) were all appointed to top positions at a time of "tumbling share prices."

It raised $4 billion selling preferred stock. In June, it raised another $2 billion in preferred shares, at much harsher terms, and $4 billion by selling common shares at $28. ...and the Market Cap is less than US$5 BN ..... the black hole is New York not at CERN in Switzerand.

It is increasingly looking, says Erin in a hasty phone call that Paulson is calling the moral hazard card and Lehman will slide into bankruptcy.... unless someone does something, CEO Fulda's (he earned US$40 Mn last year) hasty plan to . “accomplish a significant de-risking of our balance sheet,” in part by putting risky assets into a new company it would spin off to shareholders next year -- well next year might to be reachable from here she tells us.

A busy weekend is ahead as Lehman's flogs off their 55 % stake in Neuberger Berman, their prized asset management business and the bottom feeders have been churning the water Kohlberg Kravis Roberts, Hellman & Friedman, Bain Capital, Clayton, Dubilier & Rice ,Carlyle Group, Hellman & Friedman LLC , General Atlantic LLC, J. C. Flowers, Blackstone Group, and Apollo Management all named in the Press . have until tonight to seal a deal.

This sale has been on the stocks for weeks and values of US$5 -6 Bn. have been placed on the company ... a pretty girl called Mrs Schwartzman says that Stephen wants this one. Seeing he picked up $4.78 billion in compensation for 2007 she must be a happy lady anyway. Nice payday when you consider the market cap of The Blackstone Group L.P. is only US$4.16 billion today lass than half what it was when IPO'd So Stephen coulf buy back the bit of the company he sold off with the profit he made on the sell off.